Russia Defence & Security Report Q1 2012
Business Monitor International, December 2011, Pages: 129
Business Monitor International's Russia Defence and Security Report provides industry professionals and strategists, corporate analysts, defence and security associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Russia's defence and security industry.
According to data published by Deputy Prime Minister Sergei Ivanov, Russia’s military-industrial complex increased its total production by 12% last year. By contrast, its output of defence-related items rose by 18.6%. Labour productivity rose by 17%. In part, this reflects the growing demand of a country whose large armed forces have been restructured and modernised, and who are re-equipping after a long period of under-investment. The energy boom that has dramatically boosted the fortunes of Russia’s economy and public finances since 2009 has laid the foundations for a bonanza. Over the long term, funds available for the modernisation of the navy, for instance, amount to around RUR5,000bn. A sum of RUR300bn alone has been made available for the modernisation of airports by the end of 2015.
A casual glance at the headlines from the three months to the end of July 2011 shows that, among much else: the navy is buying four Mistral helicopter carriers; the airforce will be looking to purchase 48 of the new Sukhoi Su-35S fighters; various agencies are taking deliveries of helicopters, and; the number of military specialists that are to be trained by the support organisation DOSAAF in 2012 will be 130,000 – or 20,000 more than were trained in 2011.
However, there remains a significant gap between the items that appear on official plans and the items that are actually ordered – let alone paid for. Official data indicated that only 60% of the contracts that should have been placed with suppliers of equipment in the first four months of 2011 had actually been given to contractors. Through mid-2011, there was no shortage of anecdotal evidence, dismissals of highprofile officials and executives and laying of criminal charges relating to the handling of defence contracts: in short, inefficiency and corruption remains rife – notwithstanding the government’s apparent keenness to stamp them out.
A clear trend is that links between Russia’s defence industry and counterparts in foreign – notably Western – countries are growing. These linkages go far beyond the long-standing cooperation with other countries in space exploration. The Russian-Indian joint venture (JV) that makes the BrahMos cruise missile expects that sales over the next 10-15 years will amount to US$10bn. United Shipbuilding Corporation is working with French and South Korean partners on the Mistral helicopter carriers, of which the navy is looking to purchase four. Russian Helicopters, the holding company for a variety of manufacturers, is looking to buy 40 engines from France’s Turbomeca this year for installation in new Kamov Ka-62 helicopters. Italy’s AgustaWestland expects to begin production of helicopters at a new plant in Tomilino prior to the end of the year.
Negotiations between Russia and NATO over missile defence systems appear to have stalled. Defence minister Anatoly Serdyukov has noted that the supply of strategic missiles to Russia’s armed forces will increase by 300% in 2011-15 relative to the previous five-year period. That said, at the same time, Russia, alongside the United States is pledged to drastically reduce its inventory of nuclear weapons and delivery systems in line with the so-called NewSTART strategic arms reduction treaty which has been signed by both nations. Currently, Russia’s strategic forces are being enhanced with new RS-24 and RT-12M Intercontinental Ballistic Missiles. The navy is also due to receive the Borei class submarines, of which one boat is due to commission, with a further three under construction. However, the fortunes of the Borei depend closely on the development of the RSM-56 Submarine Launched Ballistic Missile which has proceeded with difficultly at times, despite some successful test firings.
Overall though, there is much in relation to which Russia can agree and cooperate with NATO. Areas of mutual interest include: the fight against global terrorism; transportation of NATO forces through (or over) Russia on the way to or from Afghanistan and; jointly developed technologies. In June 2011, Russia and NATO together conducted an exercise called Vigilant Sky-2011: the aim of this was to rehearse procedures in the event of a ‘9/11-style’ hijacking over Eastern Europe.
In the meantime, Russia remains vulnerable to terrorism resulting from radical Islam and/or aggrieved ethnic minorities. According to interior minister Rashid Nurgaliev, the number of terrorist attacks in Dagestan alone in H111 was 118, or 19% more than in the previous corresponding period. Russia continues to collaborate with other Shanghai Cooperation Organisation (SCO) member states: in September 2011, for instance, Russian President Dmitri Medvedev is due to meet with Tajikistan’s President Emomali Rahmon in order to discuss border security and other topics of mutual interest. According to Alexander Dynkin, the director of the Institute of Global Economy and International Relations, the withdrawal of NATO forces from Afghanistan from 2014 could result in greater activity from radical elements of the Taliban – both in Pakistan and in the five countries of (ex-Soviet) central Asia.
It is also important to note that Russia is performing some major changes in the way that its army is organised. The country is looking seriously at professionalizing the force. Meanwhile, the system of Military Districts is undergoing reform with the Division and Regimental sized formations being co-opted into new brigade-sized structures. Moreover, the Russian army is also to raise new rapid- and intermediate-reaction forces to improve its responsiveness.
SWOT Analysis
Russia Security SWOT
Russia Defence Industry SWOT
Russia Political SWOT
Russia Economic SWOT
Russia Business Environment SWOT
Global Political Outlook
Table: Election Timetable, 2012
Europe Security Overview
Europe’s Key Security Issues Over Coming Decade
The Role Of NATO
Security Risk Ratings
BMI’s Security Ratings
Table: Europe Security Risk Ratings
Table: Europe State Terrorism Vulnerability To Terrorism Index
Russia’s Security Ratings
City Terrorism Rating
Table: BMI’s Central And Eastern Europe And Central Asia City Terrorism Index
Political Overview
Domestic Politics
Table: Political Overview
Domestic Politics II
Long-Term Political Outlook
Russia Security Overview
External Security Situation
United States
The Western Front
Central Asia
China
Japan
The New ‘Great Game’ In The Arctic
Beyond Eurasia
Russia At Risk Of Losing Great Power Status
Russia’s Military Doctrine To 2020
Shanghai Cooperation Organisation: New Global Force Or Paper Tiger?
Internal Security
Armed Forces
Armed Forces
Historical Strength
International Deployments
Table: Russia’s Foreign Deployments 2008
Weapons Of Mass Destruction
Market Overview
Industry Trends And Developments
Table: Key Players In Russia’s Defence Sector, 2005
Arms Trade Overview
Procurement Trends And Developments
Industry Forecast Scenario
Armed Forces
Table: Russia’s Armed Forces, 2002-2008 (‘000 personnel, unless otherwise stated)
Table: Russia’s Available Manpower For Military Services, 2008-2016 (aged 16-49, unless otherwise stated)
Defence Expenditure
Table: Russia’s Government Defence Expenditure, 2008-2016
Table: Russia’s Defence Expenditure Scenario – Changing % Of GDP (US$mn), 2008-2016
Defence Trade
Table: Russia’s Defence Exports, 2008-2016 (US$mn)
Table: Russia’s Defence Imports, 2008-2016 (US$mn)
Table: Russia’s Defence Trade Balance 2008-2016
Macroeconomic Outlook
Table: Russia – Economic Activity, 2008-2015
Company Profiles
Irkut
Kazan Helicopters
Rosoboronexport State Corporation
Russian Aircraft Corporation MiG (RSK MiG)
Sukhoi Aviation Corporation
United Aircraft Corporation
Uralvagonzavod
BMI Methodology
How We Generate Our Industry Forecasts
Defence Industry
City Terrorism Rating
Table: Methodology
Sources
- Irkut
- Kazan Helicopters
- Rosoboronexport State Corporation
- Russian Aircraft Corporation MiG (RSK MiG)
- Sukhoi Aviation Corporation
- United Aircraft Corporation
- Uralvagonzavod
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